Director Of the Fair Work Building Industry Inspectorate v Robko Construction Pty Ltd and Anor (No.2)
[2014] FCCA 1328
•17 June 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE v ROBKO CONSTRUCTION PTY LTD & ANOR (No.2) | [2014] FCCA 1328 |
| Catchwords: INDUSTRIAL LAW – Penalties – contraventions of ss.45 and 716(5) of the Fair Work Act 2009 (Cth) – whether contraventions arising out of one course of conduct – where applicant’s entitlements paid in full day before penalty hearing – imposition of penalty – consideration of factors relevant to calculation of penalty. |
| Legislation: Fair Work Act 2009 (Cth) ss.45, 546(3), 716(5) |
| Trade Practices Commission v CSR Ltd (1991) ATPR 41‑076 Kelly v Fitzpatrick (2007) 166 IR 14 Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 The Community and Public Sector Union v Telstra Corp Ltd (2001) 108 IR 22 Clean Energy Regulator v MT Solar Pty Ltd [2013] FCA 205 |
| Applicant: | DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE |
| First Respondent: | ROBKO CONSTRUCTION PTY LTD |
| Second Respondent: | MR EVERETTE GALE ROBBINS |
| File Number: | ADG 384 of 2013 |
| Judgment of: | Judge Raphael |
| Hearing date: | 17 June 2014 |
| Date of Last Submission: | 17 June 2014 |
| Delivered at: | Adelaide |
| Delivered on: | 17 June 2014 |
REPRESENTATION
| Solicitors for the Applicant: | Fair Work Building and Construction |
| For the Respondents: | No appearance |
ORDERS
By way of penalty the First Respondent pay the sum of SEVENTEEN THOUSAND, EIGHT HUNDRED AND FIFTY DOLLARS ($17,850).
By way of penalty the Second Respondent pay the sum of THREE THOUSAND, FIVE HUNDRED AND SEVENTY DOLLARS ($3,570).
Penalty be paid into Consolidated Revenue.
No order as to costs.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADG 384 of 2013
| DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE |
Applicant
And
| ROBKO CONSTRUCTION PTY LTD |
Respondent
| MR EVERETTE GALE ROBBINS |
Second Respondent
REASONS FOR JUDGMENT
In this matter, the court heard an application for declarations that the two respondents had contravened ss.45 and 716(5) of the Fair Work Act2009 (Cth)[1] on 12 May 2014. The respondents, which are a company and its guiding mind and director, were not present in court. They made it clear to the applicant that they did not intend to appear. However, they had been served with copies of the submissions prepared by the applicant and it was for that reason that the court's judgment in the matter was short and relied by reference to the submissions that had been made.
[1] The Act.
The court concluded that it was satisfied that the breaches alleged had occurred and that the respondents had not paid a Mr Jason Pawlak the sum of $7,199.36, being some employee benefits to which he was entitled upon his ceasing work with the first respondent. There had been some argument as to whether or not Mr Pawlak was indeed an employee. But the court was satisfied, for the reasons it gave, that he was and thus the entitlements were due.
The court also found there had been a breach of s.716(5) of the Act, which was a failure to make a payment after the respondents had received a notice from the applicant. The court was also satisfied that the second respondent, Mr Robbins, was the guiding mind of the company and the person with whom Mr Pawlak had negotiated for his employment, and therefore that Mr Robbins had contravened the Act.
The court was of the opinion that even though neither respondent had appeared at the original hearing, they should be given an opportunity to make representations concerning penalty and it would adjourn the matter until today. Notice of this hearing had been given to the respondents and a copy of the written submissions prepared by the applicant were also served upon them. Notwithstanding this, there has been no appearance by either respondent and the court will proceed in their absence.
Once again, the court intends to rely by reference to the written submissions that were prepared. They deal, correctly in the court's view, firstly with the relevant principles that a court must consider when coming to a decision upon penalty, citing Trade Practices Commission v CSR Ltd (1991) ATPR 41‑076 at 52,152 per French J and other relevant cases. The submissions then turn to the range of factors which have been identified as relevant to the circumstances of any particular case, first in this court but then by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14 at 18 to 19. The court is sensible of the fact that there should be no mechanical use of this checklist, but it does provide a helpful guide for the matters that one should take into consideration. I will deal with those matters believed to be relevant below.
The first matter is the nature and extent of the conduct which led to the breaches. In this case, the respondents sought to persuade Mr Pawlak that he was not an employee but an independent contractor. This was solely for the convenience of the respondents and it was not the true case. In the court's view, this type of conduct is an attempt to take advantage of a worker in a manner that is not to be encouraged. Having persuaded Mr Pawlak that he was not an employee, the respondents did not pay him when his employment terminated and that, in the court's view, is an egregious matter. $7,000-odd is a not inconsiderable sum, particularly for a low-wage employee, and it is regrettable to be advised that up until yesterday that amount had not been paid. These remarks also take into account the circumstances in which the relevant conduct took place and the nature and extent of the loss and damage sustained by Mr Pawlak as a result of the breaches.
The court is advised that the applicant has no knowledge of any previous contraventions of industrial legislation by the respondents, and this is a matter to take into account in their favour. The court has to consider whether the breaches were properly distinct or arose out of the one course of conduct. In the court's view, they really do arise out of one course of conduct because the two infringements are both in relation to the same non‑payment and for this reason, the court intends to make only one order for penalty.
It is understood that the business involved is not a large one, but has had the capacity to undertake quite substantial contracts. The court is also satisfied that the breaches were deliberate. The respondents made a decision to "employ" Mr Pawlak on the basis that he was an independent contractor and therefore not to pay him these moneys. They had been told to pay the money and they had not done so, notwithstanding promises they made to the applicant. Mr Robbins is the guiding mind of the company and a director. So it can be said that senior management were involved in the breaches, although this is a concern that is usually given more consideration when large corporations are involved.
Although it would appear that Mr Robbins and the company have exhibited some contrition and made promises to pay, it was an empty contrition because no payments were made, notwithstanding that the breaches occurred a considerable time ago. However, pleasingly, Mr McDonald, who is appearing on behalf of the applicants, was able to inform the court that yesterday a payment was made to Mr Pawlak of the total amount outstanding. This has negated the need for a compensation order and is some evidence that the respondents now understand the gravity of the situation.
The two respondents did co‑operate with the enforcement authorities by explaining to them their view of the employment situation and then agreeing not to contest these proceedings. The final matter that can be considered is the need for specific and general deterrence. In that regard, the court's attention has been drawn to two of the more seminal cases, Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93] per Lander J and The Community and Public Sector Union v Telstra Corp Ltd (2001) 108 IR 228 at [9] per Finkelstein J.
These cases underline the necessity for a penalty which does provide some deterrence both to the respondents and to the world at large from acting in breach of the Act to the detriment of employees. The applicant points out that the attempt to engage Mr Pawlak as an independent contractor is “apt to obscure [the] true status” of the employment relationship and to:
“dissuade attempts to recover unpaid wages and entitlements. It is notoriously prevalent in the building and construction industry. Because the very circumstances of the engagement (owing to the conduct of the Respondents) make contraventions in relation to non‑payment of employee entitlements more difficult to detect and prove, the need for substantial penalties [for] general deterrence is particularly acute.” [at [50] of submissions on penalty]
And reference is made to Clean Energy Regulator v MT Solar Pty Ltd [2013] FCA 205 at [102] per Foster J.
The applicant has made suggestions as to the possible penalties that the court might impose and it has done that on the basis that penalties would be imposed for each of the offences. But the court has said it only intends to impose one penalty against each of the respondents and that penalty, it believes, should be imposed in respect of the contravention of s.45 of the Act in respect of which the relevant maximum penalty for a corporation is 60 penalty units times 5 and for an individual, 60 penalty units. Thus the maximum penalty, based upon the tariff for a penalty unit at the date of the contravention of $170 per unit, is $51,000 for a corporation and $10,200 for an individual.
The court is of the view that these contraventions, and the circumstances which surround them, justify a penalty at the lower end of the mid-range. Taking into account, particularly the failure to make the payment until yesterday, and the circumstances of the employment arrangements, this would translate, in the court's view, to a penalty of 21 penalty units or $17,850.00 against the first respondent and $3,570.00 against the second respondent.
These penalties should be paid to the Consolidated Revenue Fund of the Commonwealth pursuant to s.546(3) of the Act. Costs are not normally available in this jurisdiction and no order for costs will be made.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge Raphael.
Associate:
Date: 23 June 2014
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